Monthly Archives: July 2012

The Ugly Side of “face value” – How much of “our face” do we unwittingly reveal on the Internet

Both the regulatory environment in which we live, as well as, the insistence of consumers we live in an environment in which we fully expect – for the most part – to be provided with the cost of an item or service before we make a purchase.

However, price disclosure in and of itself does not necessarily mean that the consumer is being treated fairly. One of my pet peeves has always been the fact that an economy customer on a United States domestic flight can be paying either one 10th, or 10 times as much as the person sitting next to them for the same ticket, with the same privileges, and the same cost to the airline. Of course, this seeming inequity is justified by the amount of time the reservation or confirmation is made before flight is taken, the airlines need to either (a) give last-minute seats at discount because they have to generate revenue, albeit at a discount, for last-minute seats, or (b) charge exorbitantly high prices for last-minute reservations because they have kept these seats out of sale inventory at cheaper prices to accommodate the needs of people who make the last-minute reservations, and accordingly are entitled to a premium. In either case, the general feeling is that the airlines have been able to ascertain just how desperate the passenger is, and charge them accordingly.

Imagine walking into a clothing store and when asking how much an article of clothing cost you were told that “that depends on how badly you need it” which is the general feeling I have about airline charges. Fortunately, this is not the case in the retail establishment — or is it.

I recently read an article which referenced a 2006 study by Kathryn Graddy that deals with the Fulton Fish market in New York, and found that Asian buyers were given better pricing because they rejected higher prices and were perceived to have the capacity to boycott dealers that they felt ripped them off.

While that related to brick-and-mortar retail sales, apparently there are a number of companies that offer price customization software, and the article in the Economist, listed [24]7 and RealRelevance with a strong suggestion of the following.

Apparently, many retail websites are able to use technology to customize their pricing, or in other words develop close and profiles of individual shoppers relatively easily. The article goes on to say that retail websites can incorporate software to detect shoppers who can afford to pay more, or who are in a hurry to buy (kind of reminds me of the airlines) and thereby offer them pricier options or in fact charge more for the same product.

Those “cookies” that we often read about but most of us do not understand, are able to allow data aggregators to zero in on demographic data including where we live (and thereby take a stab at our income/discretionary dollars) and/or analyze how long we look at a particular product before going to the price (illustrating that we have either made up her mind or are in a rush) or the extent of our comparison shopping.

While I do not fully understand how this works, or the totality of its implications, one thing is clear – to the extent this is happening, our privacy is being invaded in a truly detrimental way, despite the fact that our personal identities may not be revealed.

The argument that full body scans at the airport are not really an invasion of privacy because the inspector viewing the scan has no idea who the person is, can only take you so far. When the product you are being offered, or the price that you pay is determined by a “deep dive” into your spending habits/web browsing patterns/income/place of residence, anonymity does not answer the problem.

Apparently, we show much more of our face then we realize, often to our detriment.